B-160938, JUN. 29, 1967

B-160938: Jun 29, 1967

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TO EDISON ELECTRIC INSTITUTE: REFERENCE IS MADE TO YOUR LETTER OF APRIL 26. FIRST PREFERENCE IS GIVEN TO CROSS-SERVICING WITHIN THE DEPARTMENT OF DEFENSE OR OTHER FEDERAL AGENCIES. PROVIDED PROCUREMENT IN THIS MANNER WILL NOT DECREASE MILITARY EFFECTIVENESS OR RESULT IN HIGHER COST TO THE GOVERNMENT.'. THE PUBLIC SERVICE COMPANY BELIEVES IT IS MORE APPROPRIATE FOR THE COVERAGE TO PROVIDE THAT CROSS SERVICING SHALL NOT BE UTILIZED IF PROCUREMENT FROM NON -GOVERNMENT UTILITY SUPPLIERS WILL NOT DECREASE MILITARY EFFECTIVENESS OR WILL NOT RESULT IN HIGHER COST TO THE GOVERNMENT. IT WOULD ALSO HAVE THE REGULATION ADD THAT IN EVALUATING COMPARATIVE COSTS. PARAGRAPH 4E OF THE CIRCULAR PROVIDES THAT THE POLICY STATEMENT IS NOT APPLICABLE TO PRODUCTS OR SERVICES OBTAINED FROM OTHER FEDERAL AGENCIES WHICH ARE AUTHORIZED OR REQUIRED BY LAW TO FURNISH THEM.

B-160938, JUN. 29, 1967

TO EDISON ELECTRIC INSTITUTE:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 26, 1967, WITH ENCLOSURES, IN CONNECTION WITH THE PROPOSED ASPR COVERAGE ON THE PROCUREMENT OF UTILITY SERVICES.

SECTION 57-103.1 (A) OF THE PROPOSED COVERAGE STATES THAT:

"/A) IN THE PROCUREMENT OF UTILITY SERVICES, FIRST PREFERENCE IS GIVEN TO CROSS-SERVICING WITHIN THE DEPARTMENT OF DEFENSE OR OTHER FEDERAL AGENCIES, PROVIDED PROCUREMENT IN THIS MANNER WILL NOT DECREASE MILITARY EFFECTIVENESS OR RESULT IN HIGHER COST TO THE GOVERNMENT.'

THE PUBLIC SERVICE COMPANY OF COLORADO IN ITS LETTER OF APRIL 19, 1967, EXPRESSES THE VIEW THAT THIS PROPOSED COVERAGE CONTRADICTS THE ESTABLISHED POLICY IN FAVOR OF THE GOVERNMENT RELYING ON THE PRIVATE ENTERPRISE SYSTEM TO SUPPLY ITS NEEDS, AS EXPRESSED IN BUREAU OF THE BUDGET CIRCULAR NO. A- 76, DEPARTMENT OF DEFENSE DIRECTIVE NO. 4100.15 DATED JULY 9, 1966, AND DEPARTMENT OF DEFENSE INSTRUCTION NO. 4100.33 DATED JULY 22, 1966. THE PUBLIC SERVICE COMPANY BELIEVES IT IS MORE APPROPRIATE FOR THE COVERAGE TO PROVIDE THAT CROSS SERVICING SHALL NOT BE UTILIZED IF PROCUREMENT FROM NON -GOVERNMENT UTILITY SUPPLIERS WILL NOT DECREASE MILITARY EFFECTIVENESS OR WILL NOT RESULT IN HIGHER COST TO THE GOVERNMENT. IT WOULD ALSO HAVE THE REGULATION ADD THAT IN EVALUATING COMPARATIVE COSTS, CONSIDERATION SHALL BE GIVEN TO COMPARABLE TAX COSTS AND OTHER COSTS NORMALLY BORNE BY NON- GOVERNMENT SUPPLIERS.

THE POLICY STATEMENT CONTAINED IN BUREAU OF THE BUDGET CIRCULAR NO. A-76 DOES NOT EXTEND TO CROSS-SERVICING ARRANGEMENTS BETWEEN FEDERAL AGENCIES OR DEPARTMENTS. PARAGRAPH 4E OF THE CIRCULAR PROVIDES THAT THE POLICY STATEMENT IS NOT APPLICABLE TO PRODUCTS OR SERVICES OBTAINED FROM OTHER FEDERAL AGENCIES WHICH ARE AUTHORIZED OR REQUIRED BY LAW TO FURNISH THEM, AND PARAGRAPH 5D PROVIDES THAT THE UNUSED PLANT AND PRODUCTION CAPACITY OF OTHER FEDERAL AGENCIES MAY BE UTILIZED. SIMILAR PROVISIONS ARE TO BE FOUND IN THE CITED DEPARTMENT OF DEFENSE PUBLICATIONS. ACCORDINGLY, WE CANNOT AGREE THAT THE PROPOSED ASPR COVERAGE CONTRADICTS BUREAU OF BUDGET CIRCULAR A-76.

HOWEVER, THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED (31 U.S.C. 686) PROVIDES THAT FEDERAL PROCURING ACTIVITIES, WHEN IT IS IN THE INTEREST OF THE GOVERNMENT SO TO DO, MAY PLACE ORDERS FOR SUPPLIES, WORK, OR SERVICES WITH ANY OTHER GOVERNMENT DEPARTMENT OR AGENCY IN A POSITION TO FULFILL SUCH ORDERS. THE ACT FURTHER PROVIDES THAT "IF SUCH WORK OR SERVICES CAN BE AS CONVENIENTLY OR MORE CHEAPLY PERFORMED BY PRIVATE AGENCIES SUCH WORK SHALL BE LET BY COMPETITIVE BIDS TO SUCH PRIVATE AGENCIES.' IN THIS CONNECTION, SECTION 57-103. 1 (B) OF THE PROPOSED ASPR STATES THAT:

"IN THE PROCUREMENT OF UTILITY SERVICES FROM OTHER FEDERAL AGENCIES, THE AUTHORIZATION AND PROCEDURES IN SECTION V, PART 7 ARE APPLICABLE.' ASPR 5 -701 (B) STATES THAT AN ORDER FOR SERVICES SHALL NOT BE PLACED WITH A DEPARTMENT OR AGENCY WHEN SUCH SERVICES CAN BE PERFORMED AS CONVENIENTLY OR MORE CHEAPLY BY PRIVATE CONTRACTORS.

THERE IS A FURTHER STATUTORY PROVISION APPLICABLE IN THE CASE OF UTILITY SERVICES. UNDER 40 U.S.C. 295, THE ADMINISTRATOR OF GENERAL SERVICES IS AUTHORIZED TO PROVIDE AND OPERATE PUBLIC UTILITY COMMUNICATIONS SERVICES SERVING ONE OR MORE GOVERNMENTAL ACTIVITIES, IN AND OUTSIDE THE DISTRICT OF COLUMBIA, WHERE IT IS FOUND THAT SUCH SERVICES ARE ECONOMICAL AND IN THE INTEREST OF THE GOVERNMENT.

WE UNDERSTAND FROM THE ASPR COMMITTEE THAT THE AMENDMENTS PROPOSED BY THE PUBLIC SERVICES COMPANY OF COLORADO ARE BEING CONSIDERED IN LIGHT OF THE STATUTORY REQUIREMENTS.